South Dakota farmers told not to comment after guilty pleas in H&I grain fraud case

Jared Steffensen of the Arlington, S.D., area, pleaded guilty to theft by deception in his H&I Grain Inc. business, at a June 29, 2021, hearing at the Beadle County, S.D., courthouse at Huron. He speculated on grain trades, and then failed to pay millions to farmers. He and his wife, Tami, could face five years in the state penitentiary. His mother, JoAnn also pleaded guilty to a felony of failing to inform state regulators that her company was failing financially.

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HURON, S.D. — Farmer victims still don’t know whether the family of Jared Steffensen, a speculating grain trader from Arlington, S.D., will go to prison after stealing millions from them.

They learned June 29, 2021, that the Steffensens have entered into plea agreements that call for fines and restitution — and the possibility of some time in the South Dakota State Penitentiary.

Judge Kent Shelton on June 29, 2021, announced the plea deals the South Dakota Attorney General’s office had struck with Jared Steffensen of Arlington, S.D., owner-manager of H&I Grain Inc., his wife, Tami Steffensen, and his mother, JoAnn Steffensen. All were part of conspiracies involved in the case, the prosecutors contended.

The agreement was struck between the Steffensens and Assistant Attorneys General Robert Mayer and Brent Kempema. The change of plea hearing began at 1:30 p.m. and lasted 14 minutes. About 50 farmers and others attended. Before the hearing, the attorney general’s office met with about 20 farmers in a meeting in the courtroom. Reporters were excluded from the preliminary meeting, and attendees said they were advised to make no statements until after sentencing.


H&I Grain Inc., operated out of Hetland, S.D., and this De Smet, S.D., headquarters, where owners in the Steffensen family covered up financial problems that grew from Jared Steffensen's risky speculation in the grain business, and ended with unpaid bills to farmers for millions of dollars. Three members of the family pled guilty to a felony conspiracy charges for misleading farmers and regulators. Now victims wonder whether they'll go to jail. Photo taken May 6, 2019, at De Smet, S.D. Mikkel Pates / Agweek

In an earlier indictment there were 17 counts. The Steffensens pleaded guilty to only one count each:

  • Jared Steffensen — Guilty of theft by deception, a Class 5 felony, with a maximum possible sentence of 5 years in the state penitentiary. The judge may impose a $10,000 fine.

  • Tami Steffensen — Guilty of theft by deception, with the same penalty listed above.

  • JoAnn Steffensen — Guilty of “failure to notify the Public Utilities Commission of H&I Grain of Hetland Inc.’s financial status, causing financial harm to grain suppliers." This is a Class 6 felony, with a maximum possible sentence of 2 years in the state penitentiary, plus a fine of up to $4,000.

The defendants said nothing other than acknowledging they understood the plea.
Shelton told those attending that he would take the plea deal under advisement and will hold a separate sentencing hearing, after a presentence investigation. He noted that prosecutors may ask for the maximum sentence while the defense will ask for the minimum. He had received several preliminary, written victim statements. Victims could be allowed to speak at sentencing.

Victims ponder the fact that former grain traders Jared and Tami Fae Steffensen continue to live in this home in Arlington, S.D., with possessions such as this camper-trailer, when they’ve taken six- and seven-figure hits. Photo taken July 2019, Arlington, S.D. (Forum News Service/Agweek/Mikkel Pates)

Frank Virchow, a Lake Preston farmer and victim, said he’ll be interested to see if the Steffensens serve any time. He said the prospect of restitution seemed remote — “a joke.” Many of the farmer claims were for in the six figures, but some were over $1 million. The Steffensens also agreed to “cooperate in the civil litigation/arbitration” of their case.

The H&I Grain case has been an outrage to farmer victims, some of whom were lured by premiums that accelerated as the company’s finances became more desperate. The South Dakota Public Utilities Co. revoked H&I Grain’s trading license on June 24, 2017, after allegations of large-scale speculation, losses and non-payment of grain market in 2016. The company’s president, Duane Steffensen, died at age 67 on Jan. 12, 2019. The company had facilities in South Dakota in Hetland, Arlington and De Smet .

Three generations

The former H&I Grain Inc. site at Hetland, S.D., was the original location for a family business that ran into legal trouble when Jared Steffensen of Arlington, S.D., accelerated speculation in grain trades, costing about 32 farmers and companies an estimated $11 million. Photo taken May 6, 2019, at Hetland, S.D. Mikkel Pates / Agweek

Duane Steffensen and his wife JoAnn took over H&I Grain in 1988 from Duane’s father, Martin. The couple served as president and vice president of the company. In recent years it was largely run by their son, Jared, now 40, and his wife, Tami. Duane, still serving as president of the company, developed congestive heart failure. Older children, Tonya and Joshua, worked for H&I in lesser roles.

Before his death, Duane, in 2018 legal depositions said Jared had joined the business in about 2002 or 2003 and within six months had started running “90% of it.” Jared had spent time with his grandfather, Martin, and attended a business school in Sioux Falls, S.D.


In 2011, Jared set up a hedging account at Country Hedging. It was supposed to be limited to 100,000 bushels, and his parents were guarantors. The limit was later raised and eventually completely removed.

CHS earlier sued the Steffensens for the guarantee. The Steffensens sued CHS for failing to monitor and control Jared’s trading. Farmers separately won a $3.7 million in a civil judgement in court in Kingsbury County. The attorney general announced criminal indictments in 2018, but its taken until now to get the guilty plea. A trial was scheduled but cancelled..

The father would say before his death that he didn’t have a credit card and didn’t know details of grain trading, or that the limits on Jared's hedging account were lifted. Jared was a city councilman from 2013 to 2016, after the grain issues surfaced

Virchow, 77, of Lake Preston, S.D., and his family farm about 15,000 acres and run crop insurance, input supply and cattle enterprises. He earlier said he’s one of the few who will speak about the case, noting that others often are “ashamed at being taken in.” Virchow is owed more than $700,000 and is part of Chad Murphy vs. H&I Grain, in which a $3.8 million judgment was reached but has gone unpaid.

Virchow said it was four years since James Mehlhaff, a warehouse regulator with the of the South Dakota Public Utilities Commission “failed to do his job” while fraudsters in similar crimes in surrounding states have gone to jail. He said victims were not given “reasonable notice” of plea agreements being worked on.

Virchow said that Steffensen — while facing numerous different counts of theft totaling millions against him — was presenting a lifestyle of prosperity. He said the Steffensens’ social media describes “much-deserved” trips to Florida, or a motorcycle rally. Jared celebrated a 40th birthday party, with entertainment by Dueling Pianos musical group at the American Legion

“It appeared to have all the frills, a pockets full of cash he likes to show off and no change in their lifestyle,” he said.

Virchow said he’d asked a number of farmers if they were going to write a letter before the trial, and most of their replies were, “what for, they already have their minds made up and don’t care about the victims or justice," Virchow said. “If they did they would have done something a long time ago.”


Timeline of the H&I Grain case

  • 1960s and 1970s — Martin Steffensen manages a Hetland, S.D., company owned by Gene Cotton of Volga, S.D. Martin and his son, Duane Jens Steffensen, later ran it as Steffensen Grain. In 1988 Duane incorporates it as H&I Grain Inc. — named for their association with a separate grain and trucking company, H&I Grain of South Sioux City, Neb.

  • 2002 or 2003 — Duane’s youngest child, Jared Steffensen, now 37, joins the business and within six months becomes its grain marketing manager. His wife, Tami Fae, later manages its business.

  • November 2011 — Jared creates a grain trading contract at Country Hedging, a predecessor of CHS Hedging Inc., Inver Grove Heights, Minn., backed by a guarantee from his parents, Duane and JoAnn Steffensen. He was initially limited to trading 20 contracts of 5,000 bushels each, or 100,000 bushels.

  • April 2012 — Jared opens a “subaccount” without his parents’ knowledge. Limits are approved by CHS Hedging officials Phylis Nystrom and Linda Bryden, and later Jenna Roe, when Nystrom is promoted.

  • 2012-2014 — CHS Hedging Inc. increases Jared’s trading limits from 100 contracts per day to 500 contracts per day. One court document estimates that the H&I account produces $800,000 in annual commissions for CHS Hedging.

  • Feb. 8, 2016 — CHS Hedging effectively removes any limits, in some cases citing software changes. From April to July 2016, Jared’s trading becomes “massive” and he becomes “obsessed,” according to one description. Jared allegedly loses $6 million to $10 million, according to a later suit.

  • June 2016 — H&I files an annual financial report with the South Dakota Public Utilities Commission, as then required by law. (Later, reporting became required quarterly.)

  • July 7, 2016 — CHS Hedging discovers it can’t withdraw $436,593 that H&I Grain owes the company from H&I Grain accounts at Great Western Bank. On July 11, CHS shuts down the H&I account, later claiming it is owed $1.9 million.

  • Sept. 15, 2016 — CHS Hedging in federal district court sues H&I Grain owners Duane and JoAnn Steffensen for breach-of-contract on their guarantee.

  • June 2, 2017 — Duane and JoAnn Steffensen counter-sue CHS Hedging and sue their son.

  • June 23, 2017 — South Dakota Public Utilities Commission formally suspends H&I Grain’s trading license and the next day revokes it.

  • July 21, 2017 — Several farmers file Chad Murphy et al. v. H&I Grain of Hetland, Inc.

  • April 17, 2018 — Kingsbury County Judge Patrick Pardy awards a $3.77 million pre-trial judgement in the Murphy case.

  • June 26, 2018 — South Dakota Attorney General Marty Jackley and Kingsbury County State’s Attorney Gregg Gass announce a grand jury has indicted all four officers in H&I for felonies.

  • Nov. 15,2018 — PUC requests an independent receiver for H&I Grain. Farmers from Beadle, Brookings, Clark, Kingsbury and Minnehaha counties file claims for $2.9 million, despite the $3.8 million judgement in the Murphy case.

  • Dec. 17, 2018 — H&I Grain, Inc., files Chapter 7 bankruptcy liquidation, declaring $10 million to $50 million in assets and the same range of liabilities. Lee Ann Pierce is named trustee.

  • Jan. 1, 2019 — Federal District Judge Karen E. Schreier orders a judgement in favor of CHS Hedging against Duane and JoAnn Steffensen.

  • Jan. 12, 2019 — Duane Jens Steffensen dies, at age 67. Obituary contributors praise him for his “strong work ethic.”

  • March 26, 2019 — South Dakota Attorney General officials meet with “producers/victims” of the Steffensens. The group reject a settlement proposal by the Steffensens and counter propose that the Steffensens plead guilty to Class 4 felony theft charges. JoAnn’s charges would be deferred if she were to plead guilty to a class 6 felony.

  • June 14, 2019 — South Dakota assistant attorney general officials meet victims a third time to describe a plea agreement that would let the Steffensens off because of Marsy’s Law, a law that purports to protect victims of crimes.

  • July 10, 2019 — Victims learn from the Attorney General’s office that the Steffensens have rejected a proposed plea deal that would have been one Class 6 violation for JoAnn, and one Class 4 felony each for Jared, 37, and his wife, Tami Fae.

Mikkel Pates is an agricultural journalist, creating print, online and television stories for Agweek magazine and Agweek TV.
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